Fund focus: Value and Income Investment Trust

Lord Oakeshott, the forthright Liberal Democrat Treasury spokesman, rails almost daily against banks, bankers and a range of other ills.

He is less well known as a fund manager and partner of Olim, the money management firm he founded in 1986.

Through Olim, he co-runs a £140m stock market-listed fund that goes by the self-explanatory name of Value and Income Investment Trust.

The fund invests in British commercial property and London-listed shares. This blend has helped it comfortably outperform the FTSE All-Share index over longer periods.

In the past decade, during which the market failed to recapture the highs of the dotcom boom, VIT's shares rose by 73%, against the All-Share's 24%.

The biggest holdings are dividend paying giants such as Glaxo and BP.

With the exception of HSBC, banks are absent among the top holdings.

Property holdings include long-leased pubs and shops tenanted by big brands such as WHSmith, Co-op and Poundland. VIT owned four Woolworths stores, all re-let since its demise in 2008.

Total returns on VIT's property portfolio have averaged 11% annually for a decade.

The stability of VIT's management and its performance record add to its appeal. But its real attraction is the discount. VIT's shares are trading at 164p, but each one represents 232p of assets, giving a 30% discount.

What explains this? Part of the answer is costly debt entered into decades ago.

Co-manager Angela Lascelles says that that this long-term debt, coupled with currently unfashionable property holdings, accounts for the discount.